Workers’ compensation insurance is required for most employers in South Carolina. This makes sure that injured or ill employees get medical care and income protection while they are unable to work. Moreover, it prevents you from being sued for damage from your employees.
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What Is Workers' Compensation Insurance?
Workers' compensation insurance, also known as workman's compensation, provides benefits to employees who get injured or ill from a work-related accident. It also includes disability benefits, missed wages, and death benefits.
In South Carolina, the Workers' Compensation Act requires that if an employee is injured or becomes ill by accident while working, that person is eligible to recover medical expenses, missed wages, and disability benefits if they suffered a temporary or permanent injury as a result of a work-related accident.
A workers’ compensation insurance company will deny coverage for certain claims, such as the following:
- Willful self-inflicted injuries
- Injuries from being under the influence of drugs or alcohol
- Injuries occurring during events outside of work
- Injuries occurring in the act of committing a felony
What Are the Basics of the Workers’ Compensation Law in Greenville, SC?
In South Carolina, the Workers' Compensation Act states that if an employee is injured or becomes ill while on the job, they are entitled to certain benefits. For instance, one of your truck drivers get into an accident and lose the use of one of their hands and is partially disabled because of a work-related accident.
They are not able to return to work and need continued medical and financial support. Workers’ compensation insurance helps cover treatment costs and replace some of their missed earnings through disability benefits.
Is Workers’ Compensation Insurance Required in Greenville, SC?
In South Carolina, if your business pays at least four employees, you are required to have workers' compensation insurance. If an employee is hurt or becomes ill on the job and the employer does not have the mandatory workers’ compensation insurance in South Carolina, the state may take the business’s assets to cover the cost of any claims.
Although South Carolina requires employers with at least four employees to have workers' compensation insurance, there are few exceptions, which include the following:
- Federal employees of the state
- Employers with less than $3,000 in annual payroll for the previous year
- Licensed real estate agents working for a broker
- People selling agricultural products
- Railroad or railway express company employees
- Agricultural employees
- Casual employees, who do not work regular hours
What Does Workers’ Compensation Cover in Greenville, SC?
Disability benefits: Workers’ compensation insurance provides coverage to employees for medical costs associated with work-related injuries or illnesses, including emergency room visits, treatments, surgeries, and prescriptions.
Missed wages: If an employee gets injured or ill on the job, workers’ compensation can help replace their lost income if they must take time off from work.
Ongoing care: Sometimes work-related injuries or illnesses can be serious enough to require multiple doctor visits. Workers’ compensation insurance can help cover their ongoing care costs, such as physical therapy.
Funeral costs: If an employee dies while on the job, workers’ compensation coverage can help pay their funeral costs and provide death benefits to the employee’s beneficiaries.
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Who Does Workers’ Compensation Cover in Greenville, SC?
There are many factors that decide which employees need workers’ compensation insurance. For example, specific jobs and the size of a business can play a big role in the decision. Even though requirements vary from state to state, most of them require workers’ compensation insurance for full-time employees. There are some states that do not require workers’ compensation insurance and include the following:
- Casual workers
- Family members under a certain age
- Federal government employees
- Real estate agents
- Business owners and partners
- Insurance agents
These exceptions do not apply to every state, so it is important to understand your state’s workers’ compensation laws.
How Much Does South Carolina Workers’ Compensation Cost?
A workers’ compensation insurance quote will be based on four main elements: classification code (industry), claims history, location, and payroll.
- Classification code: Your business is calculated based on the jobs performed and the potential risk for physical illness or injury.
- Location: Workers’ compensation is controlled at the state level, which means rules and rates will vary from one state to another.
- Payroll: Although the state requirements for coverage depends on the number of employees you have, premiums are based on total payroll, including full-time, part-time, and temporary or seasonal workers.
- Claims history: Your claims history is used to assess how safe your work environment is and how likely you are to have claims in the future. Any claim, no matter the size, will affect your premium. Equally, a lack of past claims indicates a safe work environment and may lower your premium.
South Carolina Workers’ Compensation 2020 Base Rate Examples
Generally, workers’ compensation benefits are computed and paid based on an employee’s average weekly wages. This is calculated by multiplying the employee's daily wage by the number of days worked in one full year. Then you divide that number by 52 weeks to get the average weekly wage.
Next, you add together the benefit and incentive costs, hiring, salary, and payroll taxes to determine the total compensation cost. If you want to find the monthly compensation cost, calculate the quarterly or annual costs, and divide by 3 or 12, respectively.
Listed below are some sample base rates (rate per $100 of employer payroll) as of 4-1-2020. These rates are published annually by the South Carolina Department of Insurance and are subject to change every year.
- 0251 Irrigation works: $4.18
- 1005 Coal mining: $5.58
- 0908 Domestic workers: $110.00
- 2003 Bakery: $2.75
- 2110 Pickle manufacturing: $1.77
- 2503 Tailoring or dressmaking: $0.97
- 2835 Brush or broom assembly: $2.55
It actually costs significantly more to insure domestic workers, where serious injuries and illnesses are more likely than it does to insure a tailor or dressmaker.
The Workers’ Compensation Statute of Limitations In South Carolina
In South Carolina, it is the employee’s responsibility to notify their employer of a work-related injury or illness as soon as possible, but it must be within 90 days of the injury or illness. The injured or ill employee must also file a claim within two years with the Workers’ Compensation Commission (WCC).
Furthermore, if the employee does not inform either the employer or the WCC on time, they forfeit their right to make a claim. Additionally, it is the employer’s responsibility to buy the right workers’ compensation coverage through a licensed insurance company.
What Is an Experience Rating and How Does It Affect My Costs?
In South Carolina, some of the bigger companies are given an experience modification factor or experience mod. This factor can affect your South Carolina workers' compensation premium, positively or negatively.
Your experience mod provides an indicator of how your safety record and workers’ compensation claims compare to other businesses of your size in your industry. Businesses with a higher experience mod will have to pay higher premium rates.
Experience Rating Eligibility (EMR): South Carolina employers receive an experience modification rate or EMR once they meet one of the following:
- $9,000 in policy premium is generated during the last year or last two years
- $4,500 is the average policy premium generated for more than two years
If your workers' compensation policy is experience-rated, your payments are determined with the following formula:
- Base Rate X Payroll X Mod = Premium
Your modification rating represents a debit or credit that will be applied to your workers’ compensation base premium accordingly.
- A mod of 1.0: This is an average rating and is where all businesses start when they are experience-rated. A mod of 1.0 will not affect your premium rates.
- A mod greater than 1.0: This is also referred to as a debit mod. It signifies that your company’s injury occurrence and severity rate is worse than expected for a company of your size in your industry. Your payments will increase according to your experience mod.
- A mod less than 1.0: This is also referred to as a credit mod. It signifies that your company’s injury frequency and severity rate is better than expected for a company of your size in your industry. Your premiums will be discounted according to your experience mod.
Accidents at your place of business can impact your experience modification rating for three years. Consequently, if you go many years without a workers’ compensation claim, it will make your modification factor drop.
If you would like to keep your South Carolina’s workers’ compensation expenses down, the best way to do so is to maintain a low rate of employee injury. This can be done by developing safe practices and by keeping your employees notified about how they can avoid injuries while at work.
How Can an Independent Agent Help Your Greenville, SC, Business?
You can protect your business from the risk of significant liability claims by purchasing a qualified South Carolina workers’ compensation insurance policy. Having this coverage can also make your business more attractive to experienced employees.
You can learn more about your options and easily evaluate rates by working with a local TrustedChoice.com independent insurance agent. These independent insurance agents are available to answer your insurance-related questions and help you find the best insurance companies to meet your coverage needs. Find an agent near Greenville, SC, to find out more today.
TrustedChoice.com Article | Reviewed by Jeffrey Green
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